Friday, 7 October 2016

The Zimbabwe Mining Development Corporation has dismissed its top three executives for alleged gross incompetence. ZMDC has over the past years struggled to turn around its fortunes even though it holds some of the best mining assets in the country and is central to Zimbabwe’s economic development.It has over 20 mining assets spread across all mineral classes (see insert). While it has four gold mines, only one is operational (Jena Gold Mine). Acting chairman Dr Farai Karonga confirmed the corporation had parted ways with general manager Sydney Simango, chief operating officer Caesar Zishumba and chief finance officer Wilson Chinzou.“The three top executives have since left the company. However, a more detailed statement will be provided by the chairman (David Murangari) who is currently out of the country.”Mr Simango had been at the helm of ZMDC for just over a year after replacing Mr Jerry Ndlovu.Well-placed sources said although the disengagement was mutual, the three had been under pressure after failing to turnaround the fortunes of the parastatal.“The board made a resolution that the current top management had failed to drive the corporation forward as mandated and therefore they reached a mutual agreement to part ways. Obviously the board wants to pursue a new performance-based direction,” said a source.The Herald Business understands that Dr Karonga is also the acting GM.Corruption, weak internal controls and the 51-49 percent indigenisation requirement have often been cited as the main impediments in ZMDC’s ability to attract investors.The mining group has since introduced a phased recovery approach towards the revival of its three gold mines that were either shut down or put under care and maintenance using scarce internal resources.

The three mines are Sabi Gold, Jena Gold and Elvington Gold.Inside sources said investors were reluctant to commit to the 51-49 percent structure considering the state of the mines and the amount of capital injection required in the short term.Investors were said to be more comfortable in taking up 80 percent and as a result negotiations around the gold mines have almost always broken down.According to the sources, ZMDC is also still owed about $37 million from the disposal of its 40 percent shareholding in Anjin diamond mine and there are concerns that the money will not be recovered following Government’s plan to consolidate diamond operations. herald